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Volkswagen to cut up to 7,000 jobs, wants €5.9 billion

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Staff Writer | Wednesday March 13, 2019 9:20AM ET
Volkswagen
Europe   Measures include reducing complexity and optimizing material costs

Volkswagen will be boosting the pace of its transformation following a solid fiscal year 2018.


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The brand is taking important steps this year to strengthen competitiveness on a sustained basis.

This includes the start of the electric offensive, efficiency measures in production and further progress in productivity and margins.

At the same time, the brand is rolling out an earnings improvement program aimed at achieving a sustained contribution of €5.9 billion from 2023.

Measures include reducing complexity and optimizing material costs.

The program will gradually start delivering results in the period from 2019 to 2022.

Furthermore, efficiencies in administration are to be leveraged by a stronger focus on process digitalization.

Furthermore, efficiencies in administration are to be leveraged by a stronger focus on process digitalization.

The current year will be a key year for the transformation of the brand.

Investments in future topics totaling €19 billion will be ramped up through 2023.

That is €8 billion more than originally planned for the period 2019 - 2023.

The aim is to undertake these investments using the brand’s own resources and to mitigate the rising costs of more stringent CO2 and exhaust regulations.

That requires a sustained improvement in earnings of €5.9 billion per year from 2023.

To that end, the Volkswagen brand is reducing material costs and the number of variants.

Furthermore, productivity at plants is to increase by five percent per year.

Increases in earnings and margins in Sales are also planned.

The company estimates that the automation of routine tasks will result in the loss of between 5,000 and 7,000 jobs by 2023.

That can be absorbed by not recruiting replacements for employees who leave the company for retirement reasons.

The potential number of employees born during the next three defined periods eligible for partial retirement totals about 11,000.

Restructuring along the demographic curve is therefore possible.

At the same time some 2,000 new jobs are to be created in Technical Development, which relates to electronics architecture and software.

With regard to all measures, Volkswagen has given its workforce a job security guarantee until at least 2025.

 

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